Argentina - Measures Relating to Trade in Goods and Services (WT/DS453): Report of the Appellate Body

Summary

INTRODUCTION

Panama and Argentina each appeals certain issues of law and legal interpretations developed in the Panel Report, Argentina – Measures Relating to Trade in Goods and Services (Panel Report). The Panel was established on 25 June 2013 to consider a complaint by Panama with respect to certain financial, taxation, foreign exchange, and registration measures adopted by Argentina, each distinguishing between “countries cooperating for tax transparency purposes” (cooperative countries) and “countries not cooperating for tax transparency purposes” (non-cooperative countries) in accordance with Decree No. 589/2013 of Argentina's Federal Administration of Public Revenue (AFIP). In particular, Panama challenged the following eight measures:

Measure 1: An irrebuttable presumption that payments made by Argentine consumers to creditors located in non-cooperative countries in certain transactions represent a net gain of 100% for the purpose of determining the tax base for gains tax, applied pursuant to Article 93(c) of the Gains Tax Law (withholding tax on payments of interest or remuneration);

Measure 2: A rebuttable presumption of unjustified increase in wealth applicable to any entry of funds – for the benefit of Argentine taxpayers – from non-cooperative countries in the context of an ex officio determination of the taxable subject matter by the AFIP for the purpose of gains tax, applied pursuant to the unnumbered provision added after Article 18 of the Law on Tax Procedure (presumption of unjustified increase in wealth);

Measure 3: The obligation to apply valuation methods based on transfer pricing to transactions between Argentine taxpayers and persons of noncooperative countries for the purpose of determining the tax base for gains tax, applied pursuant to Article 8, fifth paragraph, and Article 15, second paragraph, of the Gains Tax Law (transaction valuation based on transfer pricing);

Measure 4: The allocation of expenditure for transactions between Argentine taxpayers and persons of non-cooperative countries to the fiscal years in which payment for the transactions actually takes place for the purpose of determining the tax base for gains tax, applied pursuant to the last paragraph of Article 18 of the Gains Tax Law (rule on the allocation of expenditure);

Measure 5: Certain requirements that service suppliers of noncooperative countries must meet in order to gain access to Argentina's reinsurance services market, applied pursuant to SSN Resolution No. 35.615/2011, as amended by Article 4 of SSN Resolution No. 35.794/2011 and SSN Resolution No. 38.284/2014 (requirements relating to reinsurance services);